What to watch

US inflation will be the clear focus of the day ahead and fixed income markets have been rather subdued overnight with market participants not wanting to add risk ahead of the release.

• Consensus has core inflation firming to +0.4% M/M from the +0.32% M/M in March, driven by a smaller decline or possibly a rise in used autos after sliding nearly 4%. Headline is seen weaker at +0.2% M/M as large declines in gasoline weigh on energy whilst food inflation maintains its recent strong pace. The FOMC consensus appears increasingly set on 2x50bp hikes in Jun/Jul but implications further along the rate path will depend on the usual breadth of inflationary pressure and what happens to stickier rent components. For the full MNI CPI Preview click here.
• Elsewhere we have a number of ECB speakers again today. We have already heard from Villeroy and Muller and we are still due to hear from Lagarde, Elderson, Schnabel, Nagel, Makhlouf, Knot, Vasle and Centeno. Fed's Bostic is due to speak on the economy and monpol later today, too.